Crude Oil recovers on Monday, but stuck in familiar territory as WTI grapples with $79

Crude Oil rebounded to kick off the new trading week.
Despite recovery, topside momentum remains limited.
Geopolitical tensions are mixing poorly with increasing risk of oversupply.

Joshua Gibson FXStreet

West Texas Intermediate (WTI) US Crude Oil recovered ground on Monday as energy traders stepped back into barrel bets on continued geopolitical tensions in the Middle East, but steadily-rising US Crude Oil supplies are crimping upside potential in Crude Oil markets.

A ceasefire in the ongoing Israel-Palestinian Hamas conflict is proving to be a difficult task to accomplish, and Israeli forces continue to push into Palestinian territory. Israel’s refusal to accept a ceasefire deal are putting a floor beneath Crude Oil prices as investors remain wary of a potential spillover into neighboring regions crucial to global Crude Oil supply.

Despite renewed barrel buying on Monday, upside potential for Crude OIl remains limited as US production continues to outpace demand. According to the Energy Information Administration (EIA), US Crude Oil production in the Permian Basin is set to rise to its highest levels of barrel output since December of last year. Week-on-week barrel supply counts have steadily outrun forecasts as production overfills facilities, outrunning energy demand.

The American Petroleum Institute (API) will be publishing their latest Weekly Crude Oil Stocks count on Tuesday, forecast to show a buildup of one million barrels through the week ended May 10. The EIA’s own Crude Oil Stocks Change, due on Wednesday, will be publishing on Wednesday.

WTI technical outlook

Despite Monday’s price recovery, WTI remains trapped in near-term technical levels as US Crude Oil trades on the high side of a supply zone between $78.00 and $77.00 per barrel. Bullish momentum is capped by the 200-hour Exponential Moving Average (EMA) at $79.08.

Daily candles remain hampered by the 200-day EMA at 79.25, and Crude Oil is struggling to develop bullish legs after falling from the last swing high above $86.00 per barrel.

WTI hourly chart

WTI daily chart

WTI US OIL

Overview
Today last price	78.76
Today Daily Change	0.91
Today Daily Change %	1.17
Today daily open	77.85

Trends
Daily SMA20	81.14
Daily SMA50	81.52
Daily SMA100	78.18
Daily SMA200	79.75

Levels
Previous Daily High	79.56
Previous Daily Low	77.82
Previous Weekly High	79.56
Previous Weekly Low	76.71
Previous Monthly High	87.12
Previous Monthly Low	80.62
Daily Fibonacci 38.2%	78.48
Daily Fibonacci 61.8%	78.89
Daily Pivot Point S1	77.26
Daily Pivot Point S2	76.67
Daily Pivot Point S3	75.52
Daily Pivot Point R1	79
Daily Pivot Point R2	80.15
Daily Pivot Point R3	80.75

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

EUR/USD: Gains remain capped by 1.1650

EUR/USD remains in recovery-mode following the closing bell in Euroland on Wednesday, hovering around the 1.1650 zone amid renewed downside pressure on the US Dollar and a marginal improvement in the global sentiment.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold struggles to surpass $5,200

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.